Blackstone President Jon Gray expects Indian corporate earnings to expand at a mid-teens rate in the upcoming third quarter, a projection he insists underpins the long-term investment case for the Indian economy. This outlook stands in stark contrast to the prevailing market sentiment, which has been dented by persistent Foreign Portfolio Investor (FPI) outflows and a recent correction in equity valuations. Gray’s comments suggest that the underlying economic engine is still running hot, even if price discovery has temporarily stalled.
The asset giant’s chief points to macro fundamentals that remain resilient despite global headwinds. India’s GDP growth is tracking above 7%, a figure Gray describes as "pretty remarkable." For context, this growth rate significantly outpaces most developed economies and even several emerging market peers. The divergence between strong economic data and volatile equity prices has created a disconnect that institutional investors are now scrutinizing more closely.
Gray highlighted that Blackstone has completed 14 IPOs in India, demonstrating deep liquidity in the capital markets. Five of the country’s six publicly listed real estate investment trusts (REITs) were also sponsored by the firm. This track record serves as a benchmark for the depth of India’s financial infrastructure. He noted that domestic investors have absorbed much of the foreign selling pressure, keeping the market stable even as global capital rotated away from Indian equities.
The correction in equity multiples, which peaked two years ago, is now seen as an opportunity rather than a warning sign. Gray argues that current prices allow long-term capital to acquire businesses and real estate at more reasonable valuations. He drew a parallel to the post-2008 period, when many international players exited, but Blackstone maintained its presence. The current risks, involving energy costs and AI disruption to IT services, are not comparable to the systemic financial crisis of that era.
Investors should watch for a reversal in FPI flows as global growth searches find India’s earnings trajectory attractive. The mid-teens earnings growth projection for Q3 serves as a key catalyst for this potential shift. If sentiment normalizes, the combination of double-digit GDP growth and corrected valuations could trigger a re-rating of Indian assets in the coming months.